EOG believes its production rate in the Permian Basin is slowing down relative to the past few years because the shale play quality and other technical aspects of the Eagle Ford or Bakken shales are more encouraging to production. Bill Thomas, the chairman and CEO of EOG, commented in the Sanford C. Bernstein Strategic Decisions Conference held in May 2014, “And it’s our belief, the Permian is a great place to drill wells, it’s a lateral – tremendous amount of reverse potential. But it’s not the play quality, the rock quality and the technical aspects of the play are not nearly as strong as Eagle Ford or the Bakken. And it will not be able to maintain this dramatic growth rate that we have had historically in the country. And it will not be able to replace an Eagle Ford or a Bakken.”

Outlook

Increased activity in the Permian Basin has had positive effects on the entire value chain of the energy companies operating in the region. The oil and gas companies that would benefit from higher drilling and production in the Permian include oil producers like Concho Resources (CXO), Pioneer Natural Resources (PXD), Laredo Petroleum (LPI), and EOG Resources (EOG). Some of these companies are components of the Energy Select SPDR ETF (XLE) and Vanguard Energy ETF (VDE).